Chamath Palihapitiya is tearing up airlines again, asking consumers and small businesses for more money

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Chamath PalihapitiyaOlivia Michael | CNBC

If the government approves new stimulus funds, they should for individuals and small businesses, venture capitalist Chamath Palihapitiya said on Wednesday.In a meteoric rant against the struggling industry, the CEO of Social Capital expanded on comments he made earlier in the year to CNBC in which he said struggling airlines should not be bailed out because ‘they are so badly managed.

Palihapitiya said that before the pandemic, companies were already doing “the most absolutely horrible and silly form of capital allocation you can imagine.”

“Not a single dollar more should go to these companies,” he added.

Among the bad decisions he cited were about not investing in research and development, saving money or devoting more resources to their workforce. Instead, they focused their cash on stock buybacks and rising stock prices.

“It’s been happening for 15 or 20 years,” Palihapitiya said in an address to the Delivering Alpha conference, presented by CNBC and Institutional Investor. “If you were to give money to these people, you should have made much tighter guardrails for what you were going to do in the future.

Rather than directly funding the rescue of large companies, as has been done under pandemic-related programs approved by Congress and the Federal Reserve, future resources should go to small business owners and individuals, a- he added.

“If you really believe in the spinoff economy, let’s actually see how the spinoff economy would work. Give money to ordinary Americans, ”Palihapitiya said in remarks similar to those he made before opposing the bailout of poorly run businesses. “What I guarantee is that they will spend. ”

He spoke in a tense atmosphere in Washington as Treasury Secretary Stephen Mnuchin and House of Commons Speaker Nancy Pelosi (D-Calif.) Continue to try to strike a spending deal acceptable to those who are still affected by the spread of Covid-19.

At the same time, investors continue to analyze the election between President Donald Trump and former Vice President Joe Biden. The two clashed in a heated debate on Tuesday night that, while controversial and messy, did not dent investor sentiment as stocks took off on Wednesday.

Palihapitiya called the debate a “shambolic trash fire” which was “so bad” but also “in a way… incredibly clarifying”.

“The stock market said it was a harmless election at this point,” he said. “They voted with their dollars. ”

However, he warned that the politics had become more about brand than substance, even warning that reality TV star Kim Kardashian could one day become president.

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